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TracFone upgrades plans for the poor

TracFone upgrades plans for the poor

The following article, written by Tim Feran, appeared in The Columbus Dispatch Tuesday, August 17, 2010.

Low-income people in Ohio who have cell-phone service through the Lifeline SafeLink program have two new options giving them more minutes.

The move by the company handling the service, TracFone Wireless Inc., comes just a couple of weeks after two consumer-advocacy groups raised questions about the price participants must pay if they exceed their monthly allotment.

TracFone upgrades plans for the poor

The following article, written by Tim Feran, appeared in The Columbus Dispatch Tuesday, August 17, 2010.

Low-income people in Ohio who have cell-phone service through the Lifeline SafeLink program have two new options giving them more minutes.

The move by the company handling the service, TracFone Wireless Inc., comes just a couple of weeks after two consumer-advocacy groups raised questions about the price participants must pay if they exceed their monthly allotment.

The new choices include a 250-minute-per-month plan, under which unused minutes are lost, and a 125-minute plan, which allows participants to roll over unused time. Both include free handsets, and both charge one minute for each text message. Both are good for services within the U.S. The current plan offers 68 free minutes, which can be rolled over. The current plan also includes a free handset but allows three texts per minute. International service to more than 100 destinations is offered under this plan.

TracFone's expansion of its Lifeline service will be offered in all markets in which it was previously offered - Ohio and 23 other states; Washington, D.C.; and Puerto Rico.

"For the past six months, we have been extensively testing, researching, monitoring and speaking with current SafeLink customers to find out what offer best suited their needs," Jose A. Fuentes, director of government relations for TracFone, said in an e-mail.

"Based on our research, we found what our customers wanted was a choice in plans that fit their needs."

TracFone had come under scrutiny recently after consumer advocates asserted that people most likely would need more than the 68 minutes and objected to the cost of extra time - 20 cents per minute. That charge hasn't changed despite the new options. Because TracFone is a prepaid service, "It is like filling up your car with gas," Fuentes said. "Once it is empty, you have to go to the station and refill."

Lawyers for Ohio Poverty Law Center and Advocates for Basic Legal Equality, Inc./Western Ohio filed a public-records request with the Public Utilities Commission of Ohio two weeks ago to find out how many people exceed the 68 minutes and by how much.

The new plans are "a welcome development," said Michael Smalz, an attorney with the poverty law center. "The 250-minutes-of-time plan is a lot more useful and a lot more effective than the 68-minutes plan. "It certainly seems to be more than a cosmetic change. It's a real substantial improvement."

The office of the Ohio consumers' counsel also approves. "We think it's a step forward and much better terms for the program," spokesman Ryan Lippe said.

"We were concerned about customers month after month depleting their minutes and having to buy extra time at 20 cents a minute."

Smalz said the advocacy groups would continue to pursue the customer usage data, at least for the time being. The Lifeline program was created by the federal government in 1984 and enhanced under the Telecommunications Act of 1996. The Lifeline program - both land line and wireless - is paid from the Universal Service Fund that is part of many telephone bills.

Smalz noted that TracFone is implementing additional programs similar to those in Ohio in other states, including Virginia and Utah.

"Advocacy by consumer groups in Ohio and other states has paid off," Smalz said. "Not only in Ohio but in other states, consumer groups have questioned the limited benefit of TracFone's Lifeline service program."